Russian Analyst: Bitcoin Price Based in Fiat is Meaningless, It’s the Alpha and Omega of Asset Valuations
The famous Russian analyst Vladislav Ginko has talked about Bitcoin once more. If you know something about him, you know that anytime that he decides to talk about BTC, it is something very controversial, so nobody is surprised with his latest claims.
Before now, he has already affirmed that the Russian government bought several billion of USD worth of BTC and that the private sector has done it as well. Now, he claims that there is no point in pricing BTC with fiat currency.
According to Vladislav Ginko, which works at the Presidential Putin Academy, standard market capitalization models make no sense in the crypto world. His argument is that basically everything that is priced in fiat currency gets corrupted in some way. Fiat, he says, is a “biased and unjust value”, so Bitcoin simply does not need that, he said, affirming that the crypto asset was the “alpha and omega” of valuation.
Ginko believes in something that is often called hyperbitcoinization, a future in which Bitcoin is officially recognized as the official reserve currency of the world and we start pricing stuff in Bitcoin instead of pricing it in fiat.
He affirmed that Bitcoin will eventually be more powerful than all fiat-based currencies and some governments would end up “succumbing” to Bitcoin.
Therefore, the whole idea here is that 1 BTC should equal 1 BTC, not a USD value. This is, he believes, the most valuable asset in the world, the new digital gold.
He also added that Bitcoin was like Noah’s ark and that it is governed by an “invisible hand”, as it has no central authority, unlike fiat currencies. He pointed out that no single country in the world can have control over BTC, not even the United States, and this is what makes it so powerful.
Bitcoin, he argued, is better than gold because it is so decentralized and useful. He gave several reasons why BTC is so good, like having almost zero transaction costs, safe storage, being resistant to censorship, being more liquid than gold and letting you become your own bank, one of its most powerful characteristics.
He also affirmed that gold has been losing some of its value recently and that Bitcoin never had such a long losing streak (despite having some very rough times in which the prices plunge a lot, but they generally go back up later).
The Problems That Bitcoin Will Face
Sure, hyperbitcoinization seems like a great future. However, you should notice that it is not going to be completely easy. Bitcoin has all the potential to do it, but you have to solve some relevant issues before actually being able to affirm that we the process of hyperbitcoinization will happen as people want to.
For instance, mining rewards will drop a lot in around 20 to 30 years. Because of this, miners will live off transaction fees, which will need to be higher in order to support the network. The technology would also need to be highly scaled in order to be used by everybody, which can prove to be a difficult challenge, as we have seen at the beginning of 2018.
For BTC to be able to be the base price of the world, we will still have to wait a long time, since it will take adoption going up first. Because of this, we have to make an enormous progress before Ginko’s idea can be a reality.